Meet Milo Pinkerton, founder, president and CEO of Heritage Senior Living, based in West Allis, Wisconsin. Pinkerton brought a combined background in real estate and architecture, along with a personal vision for senior living, to his founding of Heritage.
Spotlight on Technology
How is Heritage positioning itself through technology use? Are there certain technologies you’re leaning on?
Pinkerton: We’re investing a half a million dollars in technology to elevate our level of care. This is a major commitment for our company.
What kind of technology?
Pinkerton: We’ve got four to five software [platforms] that we’re currently adding, including PointClickCare for electronic health records.
We really like PointClickCare. We were interviewing someone from one of the major hospital organizations in Wisconsin, and he told me, “The number one reason for readmission to the hospital after discharge, is 60% are not getting their meds delivered [as ordered].” And with the PointClickCare model, if the caregiver doesn’t deliver the medication within an hour, an alert goes to the supervisor. [Eventually the notification goes to the] head nurse, and then we review it every day.
And we’re finding out other things that are just amazing. If a resident is incontinent, and they haven’t had a bowel movement in three days, that shows up on the PointClickCare [dashboard]. If you are seeing that someone is only eating 50% of their food, that shows up on PointClickCare. We’re able to provide much better care to residents while also giving assurance to the hospitals and our partners that we can provide the highest level of care. Because of that software, we are getting better, richer partnerships.
After a family background in which his father managed a handful of apartments, he first started his own real estate company, MSP, in 1988. After starting out doing affordable multifamily properties, he channeled his passion for creating housing into becoming a full-service developer and operator of senior housing. Today, the company is the second-largest senior living provider in Wisconsin by unit count, with more than 15 locations across the state spanning independent living, assisted living, “enhanced” assisted living and memory care. We sat down with Pinkerton to learn what drives his vision, why senior housing is not the same as multifamily development, and how technology is helping forge a path for the future of senior care.
Senior Housing News: How did you get your start in senior living?
Pinkerton: I grew up in Madison and went to [the University of Wisconsin]. I got a master’s degree in real estate, but also got a master’s degree in architecture from the University of Minnesota.
But I think my story really starts with my parents, who recently passed. They were 97 and 99, and during the last 10 years of their lives I wanted to build a campus that would have seniors start in the independent side of the building and then move when they needed more care. My mother needed memory care attention, so she moved from the independent side of the building to the memory care side while my dad stayed in independent. They would get together for meals and activities, but then they would sleep in separate areas.
When my dad had a stroke, he moved to the assisted living side. They would still get together, they still had friends on the independent side and they would still party together. Even though they were separated at night, I think this plan really extended their lives.
I wanted to provide an environment that was better than what I saw in the marketplace at the time. Our “enhanced” product is really an alternative to a nursing home so that we can provide a higher level of care. The staffing ratio is higher [in enhanced assisted living], as well as [there being] nursing oversight that can keep our residents longer and monitor what they are experiencing and extend their life span.
Given that you studied both architecture and real estate, what were you thinking at that point about what your career path would be?
Pinkerton: It kind of just happened. I started to do well…I worked for a building developer out of Madison, which gave me an idea of what a development company would be with construction, development, finance, low-income housing and senior housing.
I then took a detour for five years working doing workouts of financially troubled properties, because that was popular at the time with banks. I worked first for a bank as vice president of Norwest Properties, and then on a national scale as an asset manager disposing of properties for ITT Commercial Finance. Then I started my own company.
Have you always felt very entrepreneurial? Why was that the right moment to start your own venture?
Pinkerton: I was always entrepreneurial and always a salesperson. I started out selling Wallace Brown greeting cards. I sold the pancake breakfast tickets to The Boy Scout Jamboree. On the entrepreneurial side, my dad managed and had apartments, so I kind of learned the apartment business trade through him.
During college I started doing architecture rehab work before getting my Masters in Architecture at the University of Minnesota. I rehabbed a duplex, doing all of the electrical, plumbing, carpet installation — all of that. After graduation and working for three separate companies for two-and-a-half years each, I realized, you know what? I’m ready to do this. I don’t have a client. I have very little money in savings, but I am ready to be my own boss. It was in that moment where I said, ‘I’m just going to take that risk and not have a safety net.’ But I had the background and the desire to do this since I was a little kid.
Concerns have developed in the industry in the last few years about the influx of multifamily developers and other types of property developers getting into senior living. Given your success in making that transition, what are your thoughts about that? Is the knowledge of senior living operations the crucial piece to success?
Pinkerton: It truly is, and I really would caution a lot of these multifamily developers who think that assisted living is like an apartment building. It’s not. I think a lot of them are going to have a very rude awakening.
Senior living is not just about real estate — it’s about running an operation. A typical apartment building may have anywhere from two to four staff. Our small memory care has about 20. You have to keep those positions full, you have to train people.
Can you talk through that process of learning about what senior living entailed, and if you had any mentors, or people or companies that you looked to as models for what to do, or what not to do?
Pinkerton: I was really naive back then. I went down to an Assisted Living Federation of America [now Argentum] conference to just act like a sponge and absorb the information. And for my first development…well, I came up with the master plan for this 14-acre campus in Eau Claire, Wisconsin, which I designed on paper and took to the city council. They liked the vision.
I think my initial trip to ALFA in Florida taught me to recognize the importance of offering a continuum of care. Seniors may start in independent, but ultimately they move to assisted living or sometimes memory care, and then into a higher needs level. So I got the perspective of that, the financing of how to do that and the technical aspects, and then I hired the architect and other consultants to actually get the design done.
Initially, I built separate buildings rather than a campus. And I realized quickly that in order to have this continuum, it was better under one roof.
More from the Leadership Series
It seems like a big decision to start an operating company yourself, which you did in 2002. Did working with a third-party company show you what could be done better, and that gave you confidence?
Pinkerton: That is an interesting question. I was extremely disappointed with the third-party company, so in a way we kind of fell into the idea that we were going to try the operations…I am a risk-taker, a calculated risk taker. I think I was willing to take the risk that we could do a better job than a distant third-party company. The philosophy I have throughout my whole company is that we are starting from concept to the dirt to construction to completion, and through the day-to-day operation.
Any comments on plans for the future? Do you see Heritage staying in Wisconsin? Are you looking at other states, and what has driven this concentrated focus on this one state?
Pinkerton: I think it comes back to my construction and development background where we work over and over again with a series of subcontractors who we know. We pay them on time. We keep them happy so that they’re there for us when times get difficult as they are now. They’re stretched to the max because there’s so much construction, so that’s kind of been driving our concentration in this state. There are a lot of companies that want to grow nationally, but that growth is difficult because different states have different regulations. We know our regulations. We know the people who are involved in our product. It’s easier. Would we grow outside of Wisconsin? Probably, but we would still consider the drive-time distance.
Back when you were just opening your first or second building, did you think: This could get to 15 or 16 buildings down the line?
Pinkerton: Not even close. No, I did not have a strategic plan that said we were going to do XYZ, but four years ago that’s when we did say that we’re laying out a strategic plan to double the size of our assisted living business.
I am not going to push us to grow so fast as to diminish our quality of care or our ability to manage it. I’m a slow growth kind of guy, and then we need to make adjustments as we go.
I am not going to push us to grow so fast as to diminish our quality of care or our ability to manage it. I’m a slow growth kind of guy, and then we need to make adjustments as we go.
Who are your mentors?
Pinkerton: The one that jumps out is my dad. He was such a people person and had such a kind heart and sense of gentle strength. He taught me about the value of honesty.
He instilled in me good principles and a belief in the good of man. This is a guy who never said no, volunteered for everything and was just the salt of the earth. He passed away last year, so that’s the first thing that comes to mind.
And he was in real estate?
Pinkerton: He ran apartments, so he had a small mom and pop apartment company with four buildings—21 units. He was a lawyer by trade, and he got a law degree because his dad wanted him to get a law degree. He didn’t want to get a law degree, but he honored his dad’s wishes, became an attorney and after two years just realized that wasn’t for him. He’s a better judge because he can see both sides rather than just advocate for his client.
Did he serve as a judge?
Pinkerton: No. He left his law firm after a couple of years, but he worked with the state tax department and wrote the red manual that they use for valuation for tax assessors for real estate property here in Wisconsin. That was a good accomplishment of his. He volunteered for all different areas of his church, and was a trustee, a deacon and a treasurer. He even took out the trash. When nobody could do it he would haul the trash onto his trailer and haul it to the city dump. That’s his background.
What are some of the biggest risks you’ve taken in your career?
Pinkerton: From the standpoint of development, I’m very adamant about collecting, first off, as much information as I can before taking a step. So to me, what I always look at is what’s my footprint that I’m going to be working in. So we’re in the Upper Midwest and part of the strategic plan I put together is that I wanted to be in the major markets first.
We identified the demographics, meaning the income and age appropriateness of those communities, identified our top four and then we went looking for sites in those top four and we started optioning land and going with the concept that we had. So the idea to double the size of the company, [which] was a major effort to think about how Heritage would grow on the operational side. I didn’t want to get the development ahead of the operations.
Another risk I took was in Palm Springs. I have a second home there. A person came up to me and said, “I develop high-end luxury homes, and this market doesn’t have any.” I said, “Well, let’s go and look.” So we did a market study and found a need and a demand so I did three spec homes in that community. I pre-sold two of them, and each home sold for between two and two-and-a-half million. Then I went and did a fourth home last year. It was a two-year lead time in a golf course community called Big Horn and [I] went all out with my partner who is a general contractor, who invested his fees as equity.
I put in two million dollars of capital and we built an eight-million dollar spec home, so I’m willing to take a calculated risk and that was a big risk. It was a lot of capital up front. The market could have turned, and these are second and third homes for most people in the area.
How do you define leadership?
Pinkerton: A leader is one who others will follow. They trust you. They’re your friend. A leader is a risk-taker, and is self-assured. The other part of it is you need to know your numbers. You need to set goals. You can’t lead from behind. You have to say what we’re doing in the next year or three years.
A leader has to be your friend?
Pinkerton: Yeah. I think that came from my dad and his style of leadership with a smile. The personality of the leader has to come through.
Is there anything else in terms of how you would describe your style?
Pinkerton: I actually asked people I knew about what they think of my leadership style and then I asked my husband: “What is the one thing that you think sets me apart?”
He said “You’re the biggest risk taker.”
Can you describe the challenge of ceding some day-to-day control, which must have happened as the company grew? How do you address that?
Pinkerton: As the company has grown, my management style has changed. Where I [used to be] the numbers guy, looking at everything and controlling it, I now have to delegate and I have to trust and check in. You need to be ready if there’s a problem. You also have to bring a solution. And so in a way I become more of a coach and less of a dictator. It has changed my style.
You’re in the midst of a big technology push. What’s the impetus for taking the company to the next level technologically right now?
Pinkerton: We hired an IT manager in-house, and that was the best thing. With that, we made a complete assessment of every property, every IT piece we owned. We realized we had some deficiencies, that some things were not functioning the way they should, and so now we’re out to increase the functionality of what’s already there.
It’s a lot to do all at one time, so we’re trying to pace the rollout of our new technologies. We’ve actually done a very good job, and we’ve added now one other system that we’re automating through technology, which is our purchase order system. Instead of having invoices that are coded after the fact, we actually have them pre-coded or pre-ordered from a list. Procurement Partners has a system that automates invoice coding and approval. We know we don’t lose any invoices.
I’m [also interested in] how our industry could look to AI and robots. Robotics work being pioneered in France and Japan is already having positive effects for memory care individuals.
For residents, technology is also a form of entertainment and feedback that can get the resident engaged. We do this DYNSEO product where it’s an interactive screen with questions [for memory care]. They’re having an international contest coming up where our building can compete with other senior communities in, say, Shanghai, Paris and London.
With technology we’re just kind of putting our toe in the water. I think probably three years from now there will be twice as many products. We’ll make our residents’ lives richer and fuller.
Do you feel that the industry as a whole is too slow to take on new technologies, and have you perceived a change in the last few years that adoption has become more rapid?
Pinkerton: It seems like it is more rapid.
Fortunately we have a large population of private-pay residents. I think it’s very difficult for companies that are relying on public pay portions to have the economics and money to spend what we’re spending.
If you had a CEO dashboard that came up on your computer or phone every morning or once a week or something, what would you like to see on that?
Pinkerton: It’s going to be two things that I always look at: the census and open positions.
You can’t look at it daily — you’ve got to see a trend. Are we getting more of these key positions filled? Which area are we deficient in? Certain buildings are more understaffed than others.
And occupancy is one everybody looks at but I break it out by our different care types. So is it an issue that is in memory care throughout the system, or is it the enhanced that is 100% full? Are there trends that are portfolio-wide that we need to be looking at? If so, how do we reach that pipeline feeder that is an enhanced resident?
I look at the percent of public pay, and at the detail sometimes of the number of appointments that we have, looking forward by sales consultant by building. How many referrals do we have lined up in the next two weeks?
We also look ahead 30 days to anticipate future move-ins and move-outs. Unfortunately, because of deaths, we don’t know how some of those statistics affect us.
Regarding staffing, do you have any strategies or practices you’ve put in place to help recruitment and retention?
Pinkerton: There is a group of CEOs that gets together in Wisconsin every two months, and the one best idea that came out of a recent meeting was if you’re looking for caregivers who are millennials, don’t email them. Text them.
That was like a light bulb. Why didn’t we think of that? Now it’s a 30% response. It was just phenomenal. We are also putting together a program to go into high schools, to show health care as a career path. I think we need to touch base with more high school students.
Last summer, we brought three high school students into one of our facilities, with the idea that they can talk to their classmates and next summer, we get more people who are interested. Or possibly, those same students are interested in coming back and working nights or weekends. We are also forming partnerships with UW-Milwaukee and UW-Madison.
These schools are actually looking to have some of their students come into our facilities for internships that we provide. We will provide training on-site through the nursing program, and in Madison, we are going to hook up with the business school and the nursing department so that there’s a synergy there to have nurses with business backgrounds. That could be a future for executive directors in this industry.
For retention, we have started a scholarship program for caregivers to become LPNs or an administrative track.
Do you think that the industry as a whole does a good enough job of selling senior living as a career path?
Pinkerton: As far as internal path of promotions, we started four years ago identifying key leaders who we felt could be promotable and then working with them on education and mentorships. I think we can do a much better job of that, but that is something we have done.
As far as leaders, I would prefer to do internal promotions over external hires. I’d rather identify the characteristics of the leaders I know than take the risk of an outside person coming in, because you don’t know their style or how do they fit with our culture. Having said that, we have had two campuses open up this year, and so we have had to hire from outside.
As far as leaders, I would prefer to do internal promotions over external hires. I’d rather identify the characteristics of the leaders I know than take the risk of an outside person coming in, because you don’t know their style or how do they fit with our culture.
Yet you hired externally in bringing on someone to head up operations in 2016, Pierre Verger?
And so along comes Pierre [Verger, now our chief operating officer]. I have been a supporter and an investor in education with the University of Wisconsin, and through the Innovation Fund there, they invited 25 executives from France to come over and spend a week in Madison. They worked with the nursing school and then wanted to see two separate examples of what assisted living would look like and specifically how we do market studies. So I brought along my market study specialist. I put together a PowerPoint presentation and we entertained Pierre and 25 of his fellow compatriots at one of our properties in Middleton…and served a complete meal with wine, of course. I love wine so I got my wine cellar out we had a good time and Pierre and I made a good connection. We followed up with each other after that and I went and visited Pierre in France got to know him better, and I think it was a year and a half after that Pierre said to me [he’d like to come and work for me in the U.S.].
What do you do in terms of hobbies when the stress of work gets to be a lot? How do you blow off steam?
Pinkerton: I have a Spanish aunt in southern Spain and I blow off steam by going to Europe for a month [each year]. This is a chance for my leaders to step up. I communicate with them maybe three times in that month. I’m available 24/7 and there if they need me, but it’s a chance for them to have me out of their hair. I love food and I love wine and I love to travel, so that’s sort of my number one thing.
I also love going to Wisconsin Badgers football games. That’s another thing I do. I grew up six blocks from the football stadium in Madison, so I’m a big Badgers fan. I love to downhill ski. My back’s been causing problems, so I haven’t done it very often recently. I have a picture in my office that says, “Life is a daring adventure or nothing at all,” and shows a skier jumping off a cliff.
You mentioned your husband, and one issue that we have covered on Senior Housing News is making the LGBTQI community feel welcome in the industry. I’m curious if that has informed your leadership style or your goals in any way.
Pinkerton: Being gay was never something to stop me from being who I was, but I think back when I was in a corporate environment, it did kind of impair my ability to share the complete person that I am. In that time it just wasn’t OK to come out, it wasn’t OK to bring your partner to the company party, things like that. I never really brought it up, but I think I’m a better boss because of it, believe it or not. I think I’m more attuned and sensitive to other people as a minority. We have minorities in our company and we’re sensitive to that.
Relative to niche communities, whether LGBT or Chinese American or Indian American or focused culturally in another way, have you thought of developing in this area?
Pinkerton: I guess I’m more mainstream. I’d like to have a community that’s open for all rather than to have a community that’s specifically gay and lesbian. I have a house in Palm Springs, where the population is 50% gay. And I have looked for the possibility of opening a community there because I think that market could grow and grow. I just haven’t found the right property. That would be the one I would test, but it would not be limited to gays and lesbians — it would be a gay- and lesbian-friendly community, open to everybody. I’d rather go mainstream and have it open to everybody.
We all come from different backgrounds and have different experiences, but I want Heritage to be a place where everyone feels welcome—staff, families and residents. All of our improvements have that one goal in mind—to make Heritage feel like home.